Hyosung chalked up more than 1 trillion won in operating profit in 2016, the first time it surpassed the milestone since its founding in 1966. Hyosung has maintained steady growth in all businesses ranging from conventional mainstay synthetic fibers to heavy industries and chemical business.
The company’s charming business performance is owed to the strengthening of its mainstay products - spandex and tire cords - in the global market. Each business division logged steady growth in operating profit. The ratio of operating profit was 30.7 percent for textiles, 21.5 percent in industrial materials, 18.6 percent in heavy industries, and 14.5 percent in the chemical business division. However the group saw the portion of operating profit for the textile business division covering spandex plunge from 45 percent in 2015 to 30.7 percent.
The 2016 results are expected to shore up Hyosung Group Chairman Cho’s control over the group. The junior Cho recently took the helm of the group from his father, Cho Suk-rae. The 82-year-old senior Cho is ailing.
Hyosung announced the results of its 2016 business performances on Jan. 2. The group posted 11.9291 trillion won and 1.0163 trillion won in sales and operating profit in 2016. It is the first time Hyosung topped 1 trillion won in operating profit, and the group saw a best-ever ratio of operating profit stand at 8.5 percent last year.
Hyosung saw sales decline 4.2 percent in 2016 over the previous year to 11.9291 trillion won. The group’s trading business division suffered a setback due to the sagging steel sector, but the group reaped steady operating profits in such mainstay businesses as textile, industrial materials, heavy industries and chemicals.
The business division posting the biggest operating profit was the industrial materials business division that covers tire cords. The division saw operating profit surge 48.7 percent over the previous year to 218.6 trillion won in 2016. Hyosung, taking up a 45 percent share in the global tire cord market, has reaped a steady operating profit. The heavy industries business division saw operating profit jump 24.1 percent to 189 billion won in 2016, while the chemical business division reaped 147.1 billion won in operating profit thanks to the expansion of polypropylene business.
Cho Huyn-joon Takes Helm of Hyosung Group
Cho Hyun-joon is a third-generation sibling, following in the footsteps of Cho Suk-rae (second-generation) and the late founder, Cho Hong-jae. He, the eldest son of former Chairman Cho Suk-rae, and had been groomed as heir-apparent. He has now fulfilled his role in taking office as chairman.
Cho is in his 40s. President Cho Hyun-sang, the third son of ex-Chairman Cho, is also in his 40s.
New Chairman Cho concurrently oversees the textile and ICT businesses. President Cho, also head of the group’s strategy headquarters, takes charge of the industrial materials and chemical businesses. Tire cords represent the group’s core business. Hyosung now holds a 45 percent stake in the global tire cord market.
Chairman Cho has been credited with laying the groundwork for the introduction of a merit-based regime since entering the group as a general manager of Hyosung’s strategy headquarters. The textile business he has overseen since 2007 now accounts for 40 percent of the group’s total operating profit. In particular, the group, whose mainstay business of spandex topped the global market with a 23 percent market share in 2010, has seen its global market share surge to 32 percent in 2016.
Chairman Cho inaugurated the “China Project Team” to make a foray into the Chinese market with the goal of become the global No. 1 spandex maker. He also spearheaded a scheme to build a production center in Vietnam. Hyosung now operates the world’s largest spandex production plant.
“While serving as president of Hyosung for 10 years from January 2007, Cho has been certified to have the right stuff to take the helm of the group by posting the largest-ever business performances in 2015 and 2016 in a row,” a group official said.
Chairman Cho released a statement to the media in which he said he strives to make Hyosung a world-class company through “fair play based on sportsmanship.”
President Cho, who has been overseeing the industrial materials business division after entering Hyosung in 1998, has been credited with making Hyosung the world’s No. 1 tire cord maker. Cho, a consultant-turned executive, has been praised for having successfully led exploration of foreign markets and overseas investment projects. He was included on the 2007 list of next-generation global leaders by the World Economic Forum. He has also served as executive in charge of strategy.
President Cho has challenging tasks to be addressed. Such new materials as “polyketone” and carbon textiles that Hyosung developed with huge investments have yet to take root in the market. Spandex is now earning a significant amount of money, but Hyosung is worried about Chinese competition, said the group official, adding that Hyosung’s nurturing new materials such as polyketone as a growth engine is a core task.